A couple of weeks ago, I talked to a 28-year-old woman living with stage 4 colon cancer about what she feared most from the looming repeal of the Affordable Care Act.
The ACA made health insurance affordable, Julienne Edwards told me, despite her chronic condition. Her nightmare scenario was that repealing the law could mean she wouldn’t be able to afford the treatments she may need down the road, or that her family would have to turn to crowdfunding to pay for the cost of her care.
Yesterday, the House Republicans finally released their replacement plan for the ACA in the form of two bills (one from the Energy and Commerce Committee and another from the Ways and Means Committee). Edwards and more than 117 million Americans like her who are living with a chronic illness now have a clearer picture of what their lives will look if the Republicans get their way in Congress.
Edwards’s nightmare, at least for now, seems a little more possible — but with some big caveats. The American Health Care Act, as the new Republican plan is called, would continue some of the ACA’s provisions that seemed to be designed to protect chronic disease patients like Edwards. Under the new plan, people still couldn’t be denied coverage, and insurers would be prohibited from having “lifetime limits,” a maximum on how much they’ll spend on one person’s health care.
But the new plan would introduce a “continuous coverage” clause that could uniquely punish sick Americans like Edwards. It would also hurt low-income Americans who relied on Medicaid or subsidies to purchase their health insurance.
The AHCA would continue to protect people with preexisting conditions
When Edwards was diagnosed with cancer, she benefitted from two of the ACA’s most popular provisions. She was able to stay on her parents’ insurance plan until she was 26 under the ACA’s dependent coverage provision, so her surgery and initial treatments were covered.
Then she was able to buy affordable insurance despite the fact that she had a costly illness. This is because of another Obamacare provision called guaranteed issue, which says people with preexisting conditions like cancer or HIV can’t be denied coverage.
The new Republican plan, like the ACA, mandates that insurers offer coverage to everybody, regardless of how sick they are, as Vox’s Sarah Kliff explains. This means that insurance companies can’t deny coverage to people like Edwards who have preexisting conditions. Nor can they charge them more as long as they’ve been insured continuously, although for patients with chronic illnesses, maintaining continuous coverage can be difficult.
The ACA required insurance companies to remove lifetime caps on spending, which means that people like Edwards can get the treatments they need throughout their lives without hitting a cost ceiling. The AHCA would maintain that requirement too, avoiding another of Edwards’s nightmare scenarios — that she’d hit a cap early in her life and not be able to afford some of the treatments she needed.
The new plan also keeps the dependent coverage provision. This is another big win for young people living with chronic diseases, since it means they could be sheltered under family insurance plans before they have jobs and incomes that are stable enough to cover the cost of their medical care.
The trouble with “continuous coverage” and the new tax credits
It has long been a truism of American health care that a small group of patients cost the most money. The top 1 percent of health care spenders account for nearly a quarter of overall health care spending, and the top 20 percent are responsible for 82 percent of the total.
It is this 20 percent that are the most challenging group for any insurance coverage expansion, because they have bills that are well beyond the financial reach of most people — and the government needs to decide how much money it wants to invest in a safety net for them.
The ACA’s answer to this was the individual mandate: Require everybody to buy insurance through the individual mandate, putting the young, old, sick, and healthy into the same risk pool. Those who didn’t purchase insurance risked tax penalties.
The Republican health reform plan strips away the individual mandate, and instead introduces a continuous coverage requirement. Insurance companies wouldn’t be allowed to discriminate against patients based on preexisting conditions — so long as those patients have managed to maintain health insurance continuously, without a lapse of more than 63 days.
In theory, this should encourage everybody to have coverage all the time, ensuring the insurance risk pool is a good mix of healthy and sick people.
The reality is that many people with chronic diseases may not be able to meet that requirement. “People with chronic conditions and disabilities [like HIV] are more likely to have gaps in coverage as a direct result of their conditions,” said Amy Killelea, the health reform director at NASTAD, a leading nonpartisan nonprofit that represents public health officials who administer HIV and hepatitis programs.
The research on cancer patients similarly suggests that up to 85 percent of them stop working while getting treatment, with absences that range from 45 days to six months. (This was true for Edwards: She had to put her law degree on hold, decline a job she had lined up, and stop working during her treatment. Two years after her diagnosis, she only works part-time now.)
These breaks in employment could mean breaks in insurance. If people with a break in insurance purchase health insurance individually, the ACHA would allow insurers to increase their premiums by 30 percent for the first year after their coverage gap. The extra charges would likely fall hardest on people who are already sick, since they need health insurance the most and would have to pay up. Healthy people, meanwhile, could decide to avoid the surcharge by not buying insurance on the individual market at all — rolling the dice until they get a new job that offers insurance.
Sick people who had to drop out of the labor market due to illness would end up paying more for coverage, which is why groups like the American Cancer Society and NASTAD have been lobbying against the continuous coverage. Healthy people could try to skip the surcharge altogether. The result would be more sick people and fewer healthy people in the insurance marketplace.
The AHCA would offer less help for low-income Americans with chronic diseases
Chronic diseases are a big source of lost income — not only because of interruptions in work or job losses during treatments, but also because illness can shorten the number of productive years an individual can work. When people get sick, and don’t earn as much as they used to, Obamacare helped them in other ways: It made them eligible for income-based subsidies to pay for their insurance. People who earned the least got the most help.
The new Republican plan will get rid of the income-based subsidies, and instead replace them with a new system of tax credits based on age. This means people who are older — regardless of income — are covered more generously (though the tax credits phase out for wealthy people).
“It will be harder for people living with HIV to afford plans that will actually cover their care and treatment needs,” NASTAD’s Killelea said, since the change could mean low-income folks get less help to pay for their premiums. (According to the Kaiser Family Foundation, age-based tax credits would be between 31 and 82 percent lower for a 60-year-old who earns $20,000, depending on where that person lives in the country.)
The other way Obamacare helped poorer Americans was through Medicaid expansion. Before the ACA, only low-income children and parents and pregnant or disabled people were eligible for the government health plan for the poor. Through Obamacare, the working poor could also get coverage in states that expanded Medicaid.
This had a huge impact on the chronic disease community. The Kaiser Family Foundation recently released the first national estimates of changes in insurance coverage among people living with HIV in the US, and found that Medicaid coverage increased for that population from 36 percent in 2012 to 42 percent in 2014, while the uninsured rate in this group dropped from 22 percent to 15 percent. Thousands of HIV patients gained health insurance. And that’s only one disease group.
The proposed plan would only continue Medicaid expansion until 2020 — which is a reversal from previous Republican replacement plans, which proposed cutting the program immediately. But this still leaves people who depend on Medicaid expansion in limbo. And the new plan would also change how Medicaid is funded by the government, from an open-ended commitment to pay all of a Medicaid enrollee’s bills, to a “per capita cap” system, where states would only allot a fixed sum of money to each enrollee.
It’s still not clear how much this will reduce Medicaid spending, but the projections suggest the per capita cap will result in less support for Medicaid, likely forcing states to make cuts to eligibility and benefits. For America’s sickest, this won’t be a good thing.